Slide 1: 2023 Full Year Results Presentation and Earnings Guidance
2023 FULL YEAR RESULTS PRESENTATION AND EARNINGS GUIDANCE 23 February 2024 Capral Limited (ASX:CAA) 15 Huntingwood Drive, Huntingwood NSW 2148 Approved and authorised by Capral’s Board of Directors Our Capability Our Success 1 DD
Slide 2: Agenda
Agenda 1 Business Overview 2 FY23 Highlights 3 FY23 Financials 4 Strategy 5 Outlook & Guidance 2
Slide 3: Our business at a glance
1 # 1 # Extrusion Supplier of Our business Manufacturer Industrial Aluminium Extrusions at a glance 1 # 1 # Australia’s leading supplier of aluminium Supplier of Distributor of extrusion and rolled Value Add Services Aluminium Sheet products and Plate 2 # Distributor of Commercial Window and Door Sy
Slide 4: Our business at a glance
Our business at a glance 6 Plants 8 Distribution Centres Key Markets Market Share 8 Extrusion Presses 12 Trade Centres Residential and ~28% Commercial Construction Industrial 65,000 tonnes of annual extrusion capacity Annual Turnover Total Assets Employees ~$660 million 1 ~$425 million 1000+ 1 To 31
Slide 5: Derisked the business and increased our capability for future success
Derisked the business and increased our capability for future success Key Milestones and Events 2018 2019 2020 2021 2022 2023 • Bremer packing/bundling • Bremer restructure • COVID impact • Smithfield acquisition • Record high LME • Continue Trade Centre automation $5m - Cost $6m • Market rebound H2
Slide 6: Full year highlights
Full year highlights Tony Dragicevich, CEO & Managing Director “Stronger than expected earnings driven by: • solid volumes supported by strong residential pipeline, diversified industry exposure, and share gains • maintaining margins through careful cost management and recovery.” Our Capability Our
Slide 7: FY23 Performance highlights
FY23 Performance highlights Full year results exceeded expectations, underlying EBITDA on par with last year's record Volume Sales Revenue Underlying EBITDA1, 2 (excl. rent) Underlying EBIT2 Underlying EPS 2 71,100 tonnes $657 million $62.5 million $39.5 million $1.83 71,800t in FY22 $693m in FY22 $
Slide 8: Sales channels
Sales channels Diversification of industries helps protect volume Channels to Market Diverse Industry Volume Seasonality (volume) Exposure 45 14% 12% 30% 40 40% 35 30 25 48% 20 56% 15 Extruded Aluminium (direct from mill) Industrial 10 Extruded Aluminium (via DCs) Residen�al Building Rolled Aluminiu
Slide 9: Detached housing commencements have slowed
Detached housing commencements have slowed Multi-residential expected to lead recovery in commencements 2023 Annual Dwelling Commencements (000’s) 1 Latest estimate1 173,000 starts in 2023, down 5% on 2022 Detached Housing 5% Mul�-Res Low-Rise Mul�-Res High-Rise 250 • Residential starts impacted by:
Slide 10: Recent Capral Projects
Recent Capral Projects Residential AT238 Apartments, WA Wilyabrup Farmhouse, WA Glen Iris Residence, VIC Fabricator Capral Facade Solutions Fabricator Busselton Aluminium Windows Fabricator Eagle Aluminium Products Capral AGS Systems Products Capral AGS Systems Products Capral AGS Systems Our Capabi
Slide 11: Recent Capral Projects
Recent Capral Projects Commercial NSW Rugby, NSW Kindalin Early Childhood Learning Centre, Ravensthorpe Shire Visitor Centre, WA Fabricator Arch System Fabrication NSW Fabricator LGA Products Capral Commercial Windows & Doors Fabricator Arch System Fabrication Products Capral Commercial Windows & Do
Slide 12: Industrial sector remains strong
Industrial sector remains strong despite slowdown in some segments Transport Marine Solar Industrial Resellers Manufacturing & • Strong conditions • Slower market conditions • Demand for local supply Construction • Volume to distributors General Fabrication improving • Infrastructure investment soft
Slide 13: Recent Capral Projects
Recent Capral Projects Industrial Sunlock Muscat Trailers Echo Yachts Solar Rails Trailer Manufacturer Superyacht manufacturer Clayton South, VIC NSW WA Our Capability Our Success 13
Slide 14: Full Year Financials
Full Year Financials Tertius Campbell, CFO “Underlying earnings performance remains strong despite slightly lower volume and inflationary pressures.” Our Capability Our Success 14
Slide 15: Earnings above expectation
Earnings above expectation and underlying EBITDA on par with FY22 FY23 FY22 1 Volume 1% lower than FY22 Sales Volume ('000 tonnes) 1 71.1 71.8 2 Sales Revenue decreased 5% on FY22, driven by lower metal prices (LME) $m $m 3 Underlying EBITDA in line with FY22 despite inflationary pressures Sales Rev
Slide 16: Metal cost fell from 2022 record highs
Metal cost fell from 2022 record highs Aluminium Price $A (LME & Premiums) 5.00 1. Average Premiums decreased marginally during 2023, due to slightly lower regional and smelter billet premiums 4.00 1 2. Average LME decreased 12% during FY23 to $A3,420t due to softer global aluminium 2 demand. The in
Slide 17: Strong balance sheet
Strong balance sheet underpinning expanded capital allocation Balance Sheet Dec 23 Dec22 1 Inventory reduced due to lower stock levels and retracement from record high metal prices (LME) in FY22 Current Assets $m $m Inventory 1 126.2 154.9 2 Receivables metrics remain excellent with DSO at 42 days (
Slide 18: Strong cash generation
Strong cash generation enhanced by cash release from lower working capital levels Continued strong focus on cash management. Cash conversion ratio improved Cash Flow FY23 FY22 due to reduction in working capital. $m $m 1 Working capital decrease driven by lower inventory due to reducing metal EBITDA
Slide 19: Disciplined capital allocation
Disciplined capital allocation delivering improving returns to shareholders Shareholder Distributions (cps) Interim Dividend Final Dividend Special Dividend On-market buy-back 35.0 50.0 50.0 15.0 20.0 45.0 37.5 37.5 30.0 20.0 20.0 17.51 15.0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1 Based on weighte
Slide 20: Strategy and outlook
Strategy and outlook Tony Dragicevich, CEO & Managing Director “Focus on ROI and continued improvement of long-term competitiveness, and expand distribution footprint.” Build on Optimise Grow our strengths what we do for the future Our Capability Our Success 20
Slide 21: Clearly Defined Strategy
Clearly Defined Strategy Build, Optimise and Grow GROW for the future • Leverage our capabilities into new opportunities – knowledge, national presence, quality, service • Develop innovative new products and channels to market • Enhance presence in architectural OPTIMISE what we do market • Continua
Slide 22: Improve productivity, grow in new markets
Improve productivity, grow in new markets and retain market share gains Manufacturing Distribution Sales and Marketing • Continue process improvement • Capral’s new window and door • Ongoing technology investment to programmes product range and systems improve sales effectiveness software released t
Slide 23: Improve productivity, grow in new markets …continued
Improve productivity, grow in new markets and retain market share gains …continued Market Development Lower Carbon Aluminium Solar Cladding Imports & Anti-dumping • Expand market understanding and • Grow share in the $60m+ solar rail • Work with cladding system • Retain market share gains penetratio
Slide 24: ESG Framework
ESG Framework On a path to a better tomorrow 2023 Highlights • Aluminium Stewardship Initiative (ASI) certification achieved in Three Pillars of Sustainability both Performance Standard and Chain of Custody • Utilisation of learning platforms for training of employees Environment Social Governance •
Slide 25: Outlook
Outlook Earnings guidance • Residential building commencements are forecast1 to recover slightly in FY24, lead by multi-residential, however pipeline of work in detached housing has reduced 1 Source: HIA Nov 2023 forecast • Other key markets, Commercial and Industrial, are expected to remain firm 2
Slide 26: Questions and Appendix
Questions and Appendix Our Capability Our Success 26
Slide 27: Strategic National Footprint
Strategic National Footprint Capral has a national footprint with a presence in every state 22 Darwin and Extrusion plants near five mainland capital cities Cairns 1 5. Bremer Park Manufacturing Plant • Capacity 23k tonnes Townsville 2 • 3 presses • 1 paintline • Co-located with distribution centre